Retail Inflation Edges up to 2.86% in March.

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India’s retail inflation ticked up to 2.86% in March as consumers spent more to buy food items and fuel, government data showed Friday. The consumer price index (CPI)-based retail inflation was at 2.57% in February this year. On yearly basis, it was 4.28 % in March 2018. Retail inflation remains well within the RBI's comfort level of 4% for about eight months now, coming down from 4.17 % in July 2018. The overall food inflation, measured as change in prices of articles in food basket, rose to 0.3% in March, against (-) 0.66 % in February, data from the Central Statistics Office (CSO) of the Ministry of Statistics and Programme Implementation showed. In 'fuel and light' category, the rate of price rise in March climbed to 2.42% from 1.24% in February.

Fruits and vegetables continued to register deflation at (-) 5.88 % and (-) 4.90 %, respectively. For cereal and products, the rate of price rise slowed to 1.25 % from 1.32 %, according to the data. The Reserve Bank has cut the retail inflation forecast to 2.9-3 % for the first half of the current fiscal, mainly due to lower food and fuel prices as well as expectation of a normal rainy season. For the rest half of 2019-20, it has forecast the retail inflation in the range of 3.5-3.8%. Retail inflation is the key input for the Reserve Bank of India to decide on its key bi-monthly policy decision. The RBI reduced the key policy rate by 25 basis points to 6% in its first monetary policy outcome earlier this month.

 

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